As the sole operator of nuclear power plants in the country, Korea Hydro & Nuclear Power (KHNP) has turned its attention towards revitalizing nuclear small and medium-sized enterprises which have been struggling with a shortage of projects. The initiative begins with the Shin Hanul Nuclear Power Plant Units 3 and 4 in Uljin, North Gyeongsang Province, Korea.
KHNP made a significant move towards the construction and the recovery of the nuclear ecosystem by signing a contract worth approximately 2.9 trillion won (US$2.14 billion) with Doosan Enerbility in March for the supply of key equipment for Shin Hanul Units 3 and 4. The usual timeline for such key equipment supply contracts, which typically takes more than 30 months, was swiftly reduced to just eight months, bolstering the prospects of a rapid recovery for the nuclear ecosystem.
After the key equipment contract, a series of substantial contracts for transformers, switch gears, cables, pumps, and various construction materials including steel and cement are expected to follow. As a result, it is anticipated that a total of 192 auxiliary equipment contracts worth approximately 2 trillion won, excluding key equipment, will be sequentially awarded over the next 10 years.
In addition, the company is also actively supporting the overseas expansion of small and medium-sized nuclear enterprises by easing the burden of participating in overseas projects and providing large-scale export opportunities. Following its success in securing the Egypt El Dabaa Nuclear Power Plant Second Project valued at 3 trillion won last year, KHNP secured a 260 billion won contract for the construction of a triple hydrogen removal facility for the Cernavoda Nuclear Power Plant in Romania in June this year. Accordingly, the company plans to order a total of 104 items of overseas business equipment worth 800 billion won.
Meanwhile, the Ministry of Trade, Industry and Energy and KHNP have exempted equipment suppliers from overseas business qualification assessments. They have also taken steps to significantly reduce the burden on domestic companies participating in overseas projects. This includes recognition of domestic certification (KEPIC), support for obtaining international certifications when necessary, and providing a 15 percent advance payment, along with ongoing consideration for expanding the proportion of advance payments. Furthermore, they plan to offer up to 80 percent financial support for contract payments, aiming to substantially alleviate the participation costs for domestic businesses in overseas projects.
They are also committed to strengthening the fundamental competitiveness of partner companies. In September of last year, KHNP established the Nuclear Ecosystem Activation Task Force, which involves all internal departments. The task force diagnoses issues in various aspects of the nuclear life cycle, such as construction, operation, export, and post-management, and seeks solutions. Additionally, they provide approximately 85 percent of the funding needed for research and development (R&D) related to nuclear components and equipment, which is often challenging for small and medium-sized enterprises to invest heavily in. This initiative aims to reduce the financial burden on R&D investment for nuclear-related components while leading in technological advancements.